Funding changes under the government's skills strategy will leave two thirds of further education students losers rather than winners, a report has said.

It also calls on colleges in England to help students understand new funding arrangements and dispel confusion about the actual costs of studying skills.

The report, for the Learning and Skills Development Agency, warned training for some adults would become unaffordable.

The government said funding was being prioritised to help those most in need.

Skills minister Phil Hope said: "This is about creating winners across the whole community and helping employers become more competitive."

The government will go on subsidising much of the cost of leisure courses so these still represent exceptional value

Skills minister Phil Hope

But the Association of Colleges said the overall cap on adult learning funding would mean fewer adult learners.

The UK is said to need 3.6 million more workers with GCSE-level skills.

The LSDA report assessed the impact that limited funding for adult education - after the government's comprehensive spending review for 2005-2008 - would have on students.

WHO DOES NOT PAY

16 to 18-year-olds

Adult learners (people aged 19 and over) on basic skills courses

Adults studying for a first full Level 2 qualification

Adults pursuing a Level 3 qualification in technical and associate professional skills in shortage areas

Adults retraining for new careers or a return to the labour market, especially where there are skills shortages

It questioned more than 4,000 adults between September 2004 and February 2005.

It found that many students would have to pay a larger share of the costs, with fewer entitled to free education and training outside the workplace.

It also found more colleges were withdrawing their fee concessions from students, especially older learners.

Currently, between seven and eight million adults are entitled to study for free a full Level 2 accredited qualification, equivalent to five GCSEs at grades A* to C.

However, the report says, those taking only part of a Level 2 course are not covered.

"The rules are very confusing and hard to comprehend," it said.

'Perplexed'

According to the study, three quarters of all FE students have to pay towards the costs of their studies, and two-in-five pay tuition fees.

Their total costs average £663, of which about half - £328 - is for tuition fees.

"In future, most students will be charged tuition fees, and fees will be higher, yet it is not clear whether they will be prepared to pay," the report said.

Students were "perplexed" about the costs of study, and were "likely to be even more so" as fees increased, it said.

Course places will be cut and the cuts will not be restricted to leisure and recreational courses

The Association of Colleges

Mr Hope said: "With a new balance of responsibilities between government, business and learners, employers and those with qualifications will have to contribute more to their learning.

"All the evidence confirms that most people believe they should pay much of their own fees for personal development learning."

A spokesman for the Association of Colleges said: "The Department for Education and Skills estimated in October 2005 that there were to be 500,000 fewer places on adult learning courses between 2006 and 2008.

"The extra income that colleges might raise from higher fees will not cover the funding shortfall. Course places will be cut and the cuts will not be restricted to leisure and recreational courses."